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Thursday, March 30, 2017

Let's keep it simple this morning

Key short term support on the major indices:

$SPX 1 min chart. Short term support 2355. Looks like wave 4 bullish consolidation in a tight range. This consolidation can continue into next week, before breaking out and taking out our 2370 target.

$DOW 5 min chart. Support looks like 20575

DOW 30 min chart: More support @ 20540

The Russell 2000

$RUT 5 min chart. If the Russell was seen breaking out this morning, 1975 would become support, but I'm going to bet it pulls back to my lower triangle line around 1358. To be honest I don't have a good handle on this market.

REITS (IYR) - see the right shoulder on a bearish H&S pattern. To be honest H&S patterns usually don't play out accordingly - in a bull market - but this one might... Interest rates to rise suddenly? And Gold tends to move in the same direction as REITS, and you know what I think about gold.

$SOX
Very short term support on Semiconductors is the thin pink line, and at the lower blue line, around the 995 area, as tweeted last week. Good example of a chart that's still trending up. Stop hunt looks like 991. Once this channel breaks, look out below.

That's about it. Looks like stocks want to head higher, once money is put to work in April. Gold, Silver, and REITS, and Treasuries, could get crushed. Tech is being stubborn, and probably the most rigged market of all. Take Care, AA

Wednesday, March 29, 2017

S&P rallies off the 50 day

We got our reversal on Monday (as predicted), and by yesterday's close the market had taken back the loses of the past 2 weeks. Trump is being made the scapegoat, as expected, but what's also obvious is that Trump (good) news is going to send the short sellers running for cover. Beware the short squeeze.

The charts don't look as pretty as they have for the past few months, and it could be a while before a clear pattern emerges. Best bet is probably to sit on your hands for a week or 2.

We've seen some real damage in the financial sector, followed by a short squeeze, and that feels like a bear market. A shakeout below the (blue) trend line, followed by a short squeeze isn't unusual, and going by the daily candlestick chart below, you want to sell this market. If we were seeing some follow-through on yesterday's buying, and a gap above the blue line that would be a different story.

$SPX DCS chart looks like a bearish back-test.

Financials have traded into a down-turned bearish channel. If it breaks out of this pattern then I suppose the short squeeze will continue, but until we see that, the trend is your friend. Also be sure to check out the broken $BKX chart located in the public charts, and sell the bearish back-test.

I see a possible down-turned megaphone pattern developing on the $INDU, with a sell target at my red line? Could also break out after a pullback, but the market has a lot to prove here.

SPX - short term trending up on a 5 min chart, but the pattern has changed. Looks like a bearish leading diagonal triangle in purple. Wave "a" target looks like 2370, then a pullback, then another rally in wave c. It takes time for patterns to develop, even on a 5 min chart.

It's possible wave "D" goes higher than the previous all time high, but like I said the market has a lot to prove. Maybe we see a run for the exits ahead of the Passover holiday, followed by a low volume rally into April OPEX.

Canada - Also looks like a suckers rally in wave B on the $TSX, but in a broadening (bearish wave A) triangle.

I don't really see energy tanking here, but Canada is heavily invested in miners.

Miners could see a big move.

$GLD - Gold seen breaking down

Oil - reversal and a breakout

Treasuries: Treasury markets are moving the equities market, so there's a good chance we trade sideways, and choppy for a while, but at some point the FED is going to reverse itself. A topic for another day.

Monday, March 27, 2017

Dow trades into what looks like a panic wave E, on the short term charts. Should see a violent reversal out of that panic wave, as soon as today's opening bell. If it overshoots the target there's support at the 50 day moving average.

Here's another view showing what looks like a bullish down-turned megaphone pattern.

Still Watching $TRAN for guidance

$SPX looks like a bullish back-test. Get everybody bearish ahead of the long holiday and then steal their money (again). Another bear trap. Calling this a "double bottom", on the shorter term charts.

$SPX Another view - testing key support

No new lows for Oil, and I'm still anticipating a military conflict, that will send Oil back to $70

I don't like the candlestick analysis on NATGAS

Nothing has really changed since last week, except the little shakeout on Friday, on higher volatility.

The fact that RINO-Care didn't pass has little to do with it. The swamp market likes gridlock in Washington. This is just window dressing. Financials were sold and energy bought.

On a side note India's $NIFTY breaks out to all time highs

EURO breaks out

1. Continued window dressing headed into the end of the quarter (on Friday)
2. Money put to work and short covering... ahead of the long holiday. Expect low volatility.
3. April OPEX is the 21st, and money will have to be put to work when traders return.
4. Sell in May, and go away.
AA

Friday, March 24, 2017

Using market leader $TRAN as a guide

$TRAN has also been following oil, which isn't normal, because Airlines typically benefit from lower petrol (oil) prices. My thought is that tankers, and trucker, sold off as Oil went lower, although I haven't cross-checked separate $TRAN components. $TRAN stands for "Transportation" btw

Assuming Airlines have sold off with oil, this looks like the travel ban trade? Just a thought.

Yesterday I noticed an interesting pattern developing on the $TRAN chart - another broadening triangle pattern. These patterns form in emotional markets, and once they complete, they mark a major reversal.

$TRAN looked like it had topped out in wave 5 - in a smaller contracting triangle, but the lack of selling pressure seems to rule out a major top in wave 5.

See the ALT: (wave) "4" target in what looks like a broadening pattern.

Tuesday, March 21, 2017

Window dressing season

Saw money come out of financials yesterday, yet the market hardly moved. Points to money managers re-allocating funds going into the end of the quarter. Pretty dull market. See the charts of doom, to see the $BKX testing the 50 day.

Fifth Third bank is bouncing off the top of the pattern, so I'm not expecting much selling, yet...

SOX popped higher. Saw that coming last week, and called it a "sell". Looks like a reversal to me.

NATGAS popped off the top of the (previous) channel, and comes up against serious resistance. I'd be a seller.

Oil pulled back slightly. Support on WTI becomes 49.25

Energy - I like many energy names, and the sector over all is way oversold.

Gold miners - I'd be a seller....

There are a few miners I like.

Yamana $AUY

$GFI - on a breakout back above 3.57.

$AU also wants to snap back into the Easter holiday short covering

Other miners like Glencore LSE $GLEN.L haven't even begun to correct.

REITS: $RMZ has snapped back nicely. Take the money and run.

The broader market looks weak, and I'd expect the rug to be (suddenly) pulled out ahead of the Easter holiday, which happens to occur 1 week ahead of April OPEX. That would set up for the next short squeeze.

Support on the SPX is the upper blue line. Support @ 2277 (the previous high)

So, the market is holding up for now, but I'm still expecting a reallocation in mixed markets.

Trade whatever works, and snip gains wherever you can. With any luck we'll see a bear market develop in Semiconductors.

Friday, March 10, 2017

Market reversal

Yesterday I tweeted out that "I hate this market", but it's actually a love hate relationship. I could not wait to review the charts this morning. I love the challenge, and the satisfaction, of doing something most people think is impossible. It's just that remaining bullish in an unhealthy market, is becoming a bit uncomfortable. Think it's been a year since we've seen even a 1% pull back?

Saw a little shakeout below support an hour before yesterday's close, and market futures are seen snapping back in a big way this morning. The fact that we saw a lot of short covering into the close, tells me these weren't pro-short sellers; these were retail bears, being set up, as usual. When the powers that be (pro-shorts) are in control of the selling, they like to sell into the close, which causes maximum panic (psychologically).

I'd rather not see the market gap up this morning, but once the bear trap is set, that's how it goes.

The keys to finding the absolute bottom on this pullback was the REIT's chart (which traded into a classic broadening triangle pattern), $VIX resistance (which I tweeted around the same time the market reversed), and the lack of downside acceleration, below support. Pretty mild as far as shakeouts go.

The Dow:

$SPX: Support becomes the breakout point, above 2366.25

Oil - wti crude found support above 49.20 this morning. Too soon to say where it goes next. Seeing resistance on the USO @ 10.75 - 10.80. The USO is supposed to track the WTI, but it's an ETF, so the chart becomes skewed over time; a topic for another day.

Energy - resistance is 595 on the $DJUSEN. I see that being taken out quickly, since this pullback was only a 38.2% Fib retracement of the entire rally in Energy, which started in 2016. Could see a real upside surprise.

$RUT Resistance on the Russell is 1392.71

Gold remains in the dumps as it continues to test the 50 day. Should see plenty of short covering in precious metals, ahead of the Fed, next Friday. A rate hike is priced in, so if Gold remains in the dumpster, I'd be anticipating a, "buy the news", event.

Miners ""

REITs - When I recommend a trade I like to double-check the charts. The $RMZ is a small cap fund, which drives the corresponding leveraged 3X ETFs DRN.

The short term $RMZ chart I tweeted out yesterday, corresponds with the LT $IYR chart, which is the most reliable REIT chart.

Thursday, March 9, 2017

Oil

Oil broke key support yesterday, and plummeted 5%, and the rest of the market hardly moves, on an otherwise quiet trading day? $VIX only ends up 1 cent, no fear? That says a lot.

As you probably remember from a few weeks ago, I revealed the stop hunt on Oil, and now, weeks later (yesterday), we see exactly what you would expect to see when stops are taken out, but is oil broken? No. How about energy stocks? Not even close...

I can't say for sure this isn't the beginning of a larger correction in Oil, but we don't see oil gapping down, this morning, as you would expect to see is a major reversal. What we see is pro-shorts backing up the truck.

This all points to the same ol' dirty tricks being played by the banksters, and their hedge funds, who with the help of the Fed, and the financial networks, who are all owned by the same criminal who lend us our own currency with interest, rig (false) economic recoveries, rig the gold markets, rig the currency markets, and even go as far as to steal from their own clients, in broad daylight. This is the "new normal", but maybe not all that new.

Do you think the deep state wouldn't cause an international incident, in order to drive oil to new highs? Iran is our ally in Iraq, and all they'd have to do is convince them to torpedo a US, or British, ship, in the straights of Hormuz. If it happens, god forbid, I'll be the first to call it a "false flag", because we already see the media selling us a war with Russia (Iran's true ally).

The Oil Charts: Looks like a panic wave E of Primary wave (B). This can be a tricky triangle pattern to identify, but it typically ends with a violent reversal, once wave E completes. This morning - in pre-market - we saw support taken out, but that doesn't count. Support is 39.20, which is in the price territory of wave A @ 49.95. This is where oil should reverse, so if instead we see oil continue to plunge, don't waste any time getting out.

To add to the legitimacy of this long oil trade, Canada pulled back sharply yesterday, and looks like it's setting up for a powerful wave C, at least. This is one to watch. 2 minute chart.

Energy: Trading energy is a less volatile option, and I like this beaten up name.
$BAS - on sale. Long term hold, use the recent low as your stop, and you reduce your risk significantly. I see an easy double. This is the dash for trash trade that you typically see this time of year.

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About Me

I use a hybrid blend of technical indicators; cyclicality, sentiment, chart patterns, and more, to analyze the current market environment and provide short and long term outlook. It was never my intention to become a market timer, let alone try to make a living at it! It just came naturally. In 2010 I became a Hall of Fame Author at stochcharts.com after calling the flash crash, the subsequent rebound, and the eventual bottoming of the market in July of that same year. I drew quite a following, and needed more room to write, so I started this blog. Someone suggested I add a PayPal button, and the rest is history. This has all been a great learning experience, and I am very grateful for the opportunity. Please follow me on Twitter for the latest charts and my continuing up to the minute market outlook.